The retail market : competition choice and challenges

This presentation includes a brief overview of the corporate structure of Veridian Corporation and discusses the concept of customer choice and competition regarding the electric power industry in Ontario. Pricing and price stability was also discussed with reference to the outlook of electricity retailing. The Veridian holding company employs a total of 149 employees within its corporate structure which includes Veridian Energy Inc., Veridian Connections Inc. (a local electric distribution company), and Firstsource Inc. (an energy retailing business). Veridian operates in the Ontario cities of Pickering, Ajax, Clarington, and Belleville. The author notes that true customer choice occurs when customers have accurate price information before they buy a product, or when they have choice regarding who they buy the product from. Likewise, true competition occurs when there are multiple suppliers, when there is sufficient supply, and when prices are determined by demand. Although the electricity market in Ontario was opened to competition on May 1, 2002, customers do not really have a choice, nor does true competition exist. The author suggests that the Pickering generating station must be brought back on-line, as well as an investment climate that will attract new investors in power generation to Ontario. It was noted that government intervention is not helpful in stimulating investment in the power system. Pricing and price stability was discussed with reference to current trends in the import/export balance. The volatility in prices is expected to get worse in the near future, which is particularly detrimental to large power users who are seeking the assurance of a fixed price so that they could predict their production costs. 2 tabs., 4 figs